What Our Reported Financial Results Don’t Clearly Show

The results that we posted are not nearly what we want them to be. They also overshadow all of the work that’s being done by our associates, our vendors and the other businesses we work with, along with everyone who is developing better ways for us to serve our members.

We are transitioning from a business that has historically focused on running a store network into a business that provides and delivers value by serving its members in the manner most convenient for them: whether in store, at home or through digital devices.

Together, we’re investing in capabilities to enable our members to interact with us and access the widest possible assortment of products and services. We’re enhancing our membership benefits associated with Shop Your Way, and developing digital and social relationships with our members. We’re using data and analytics to make targeted offers and decisions delivered in real-time. We’re expanding our reach through increasing the merchandise offerings on Marketplace and enhancing delivery options.

The annual investment associated with these activities is measured in hundreds of millions of dollars and hundreds of thousands of hours of hard work by our associates and the other members of the team.

We see signs that it is working. We’ve had consistent annual digital growth and significantly-increased engagement from Shop Your Way members. We continue to leverage our strengths as the distinction between physical and online retailing blurs. The fact that these results are obscured by our overall performance doesn’t make them any less real or any less central to the needed transformation of our company.

I want to thank the associates and the businesses that are supporting our transformation. I know how much effort you are putting into our changes, and I – along with many others who look closely at our company – can see the results. As it increasingly bears fruit, I am confident that the results of your work will become a clearer part of our overall picture.